Informal employment in SCO countries : realities and prospects

Abstract

Based on the inter-country analysis, the article proves that informal employment in countries that are members of SCO is the adaptation of the population to social and economic, and institutional conditions formed in the region. Russia has the greatest losses from a wide spread of informal labor practices as a result of considerable losses of centralized funds, monetary funds, decrease in the professional qualification of employees, and understatement of salary rates. The latter is the consequence of the mass inflow of labor migrants from Central Asia to the sectors with a wide involvement of employees under informal employment conditions. The authors have determined that for the excess labor resources of the Central Asian region, Russia and SCO as a whole were tools of regulating the labor market and internal political situation. In China the wide spread of informal labor relations is stipulated by the increase in the availability of already cheap multi-million labor resources that for several decades have been making up the main factor of the economic growth of the country. According to the forecasts of the article authors, in the medium term the PRC’s government is not going to solve the problem on informal employment in spite of the arising problems related to ageing of the population and the lack of the citizens’ pension provision system.